China’s State Council has announced a new national pension plan under which the country’s 40 million public employees will be required to pay into the previously partitioned system, The Financial Times reported. The reform of the dual-track urban pension system–in which corporate employees must contribute 8% of their salary to the pension system while government employees contribute nothing–follows years of delays and intra-government wrangling. The reform also targets the gap in pension benefits favoring public-sector employees, phasing in less generous benefits for current and newly hired public workers compared to their private-sector counterparts.
China Economic Review